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How to Choose a Payment Services Provider
The first thing you need to do to start monetizing your products in an exotic country is to select a supplier of payment services. For any project that has previously operated in just one market, it is important to understand that the tariffs charged by payment service suppliers are by no means the main criterion when making your choice, as your payment partner will play a key role in your business. To get started:
- Analyze which specific markets the company will be entering and the key targets it aims to achieve in these markets;
- Decide where the legal structure will be incorporated. A startup is unlikely to be able to decide on a legal structure by itself, as it lacks detailed knowledge of all the countries concerned and their tax systems. The optimal solutions should, therefore, be suggested by a provider.
These two steps will significantly narrow down the list of suitable payment services. Only then, in stage three, should one begin negotiating with specific payment system providers, paying due attention to their tariffs and the finer points of working with them.
The best deal will definitely be bank cards from international payment systems (their tariffs are publicly available and completely transparent). But in regions where they are not popular or are used alongside alternative means of payment, it is important to offer people tools they are familiar with. In this golden age of cross- border commerce, the absence of a familiar payment method could deter a customer or drive him straight into the hands of a competitor.
Acquiring by alternative means of payment that are popular in exotic countries is more expensive (operators used to charge commissions of 40–50%, but these are now in the 4–10% range) and their operating costs are higher, because they have their own user base and often have few or no rivals, which means they are in no hurry to cut the cost of their services.
The most promising alternative methods today are mobile operators and social networks or messengers. And they will continue to grow as mobile internet and smartphone penetration increases. But there is a chance that alongside this growth there will be tougher competition and a reduction in the cost of services. At the same time, in a number of African countries and in many places in Latin America people prefer to pay for purchases (where physical goods are concerned) by cash upon delivery, and in some places via special payment terminals or bank bills. This is usually due to high levels of fraud in the region or due to low penetration of financial services.
In Brazil, they have an equivalent to our payment terminals, known as Boleto. When paying by this method on the website, the user receives a coupon and then goes to any nearby supermarket and pays there in cash. It can take days or even weeks to credit the funds to the seller because, naturally, these actions do not occur simultaneously. There are also other alternative methods of payment in Latin America, which involve lots of small payments because nobody keeps large amounts of money in their mobile account or virtual accounts.
Another important nuance is that even if an operator’s brand is present in several countries this does not mean that its tariffs will be identical across the region. Major operators have their own aggregator partners, added to which the financial status and even tax rates of individual countries also make a difference.
Asia
The Asia Pacific digital commerce market is the biggest in the world. It grew by 38% in 2015 and now accounts for 53%of global turnover. And this figure is forecast to reach 63% by 2018. Asia is a multifaceted and densely populated region, where payment system preferences vary greatly between developed and developing countries. Yet there is one common trend: people in Asia are switching to the alternative methods offered the by the digital world. Mobile wallets are growing in popularity in developing countries, where the number of users is twice that in the developed countries of Asia.

The biggest Asian market is China, with local payment services Alipay, Tencent and UnionPay calling the shots. Alipay and Tencent are direct rivals: the first was set up by the giant Alibaba and operates both online and offline; the second has flourished in China’s most popular messenger, WeChat.
Shoppers in South Korea, Taiwan, Hong Kong, Japan, the Philippines and Indonesia are pretty keen users of bank cards. Over 30% of online purchases in Indonesia and Thailand are made via social networks (Facebook and Line), which have introduced new commercial functions in that region. In South Korea, the number of users of local e-wallets Naver Pay and Kaka Pay doubled in 2015 to reach 10 million,
Asia
- 53% of global turnover is accounted for by the Asia Pacific digital commerce market
- 63% of global digital commerce trade will be accounted for by the Asia Pacific region by 2018
- 30% of online purchases are made via social networks in Indonesia and Thailand
- 10 million Naver Pay and Kakao Pay e-wallets were registered in South Korea in 2015
Popular Payment Services
China Alipay, Tencent (WeChat), UnionPay
Indonesia and Thailand Facebook, Line, payment cards
India Payment cards, M-Pesa, OxiCash, ITZ
South Korea, Taiwan, Hong Kong, Japan, Philippines Payments cards, Naver Pay, Kakao Pay
In India, payment cards took 40% of the market in 2014, with mobile payments accounting for 2% (and this segment is growing, according to Vodafone). The remainder was split between all sorts of wallets or cash post payment (which predominates in Vietnam). But mobile payments have grown particularly fast in India over the past two years. Not long ago there was an uproar over the government’s anti-corruption policy, as a result of which large-denomination banknotes were taken out of circulation. The government is encouraging Indians to pay via their mobile phones, and although by no means all of the population is ready for this there are good reasons to believe that mobile commerce will develop rapidly there. People in India are currently using services such as M–Pesa, OxiCash and ITZ.
The biggest cross-border providers of payment services in Asia are Alipay, Tenpay, PayEase, AsiaPay, NTT Com Asia, PaySec, Red Dot Payment, MOLPay, 2C2P and E-context Asia.
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